COVID-19 global supply chain disruption risks need management

Sheep Central, April 17, 2020

DISRUPTION to global and import input supply chains during the COVID-19 pandemic were emerging risks to Australian agricultural producers that needed active monitoring and management, an ABARES insight report said today.

The Australian Bureau of Agricultural and Resource Economics and Sciences’ (ABARES) latest insights report found Australia did not have a food security problem, but that the nation’s producers relied on global supply chains and imported inputs.

Shortages or disruptions to these inputs have not yet been widespread in the pandemic, but could impact on profitability, the report found.

“While action is already in train to address key issues, it will be important for business and government to continue to actively monitor and manage these emerging risks,” ABARES executive director Dr Steve Hatfield-Dodds said.

Dr Hatfield-Dodds said that despite temporary shortages of some food items in supermarkets, caused by an unexpected surge in demand, Australia did not have a food security problem.

“The COVID-19 pandemic has taken Australia and the world by surprise. Coming after severe drought conditions in eastern Australia, concerns have been raised about Australian food security. These concerns are understandable, but misplaced,” Dr Hatfield-Dodds said.

“Australia does not have a food security problem, with Australia exporting about 70 per cent of agricultural production,” Dr Hatfield-Dodds said.

“Australia produces substantially more food than it consumes, even in drought years.  Some of our largest industries, such as beef and wheat, are heavily export focused.

“Other industries like horticulture, pork and poultry sell most of their production into the domestic market, with an emphasis on the supply of fresh produce,” he said.

The report said Australia imported only about 11 percent of its food by value.

“These imports play an important role in meeting consumer preferences for taste and variety,” Dr Hatfield-Dodds said.

“Australian agricultural production and food supply chains are adapted to cope with our very variable climate.

“This results in stable supply for domestic consumption, while exports absorb the ups and downs associated with wet and dry periods,” he said.

The report said Australians are wealthy by global standards and can choose from diverse and high-quality foods from all over the world, at affordable prices, regardless of seasonal conditions or changes in world prices.

“Most Australians can afford to purchase healthy food that meets their nutritional needs.

“Global food supplies and access has improved dramatically over the last 70 years, driven primarily by increased physical productivity and crop yields,” Dr Hatfield-Dodds said.

“Recent rain and a positive seasonal forecast make it more likely that production volumes will increase, providing the best outlook in several years.

“Global grains stocks are also abundant,” he said.

“The International Grains Council is forecasting that world wheat, rice, maize (corn), and soybean production will all reach record levels in 2020–21.”

The latest ABARES Insights paper, Analysis of Australian food security and the COVID-19 pandemic, is available here.


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